COSATU urges SASSA to reconsider its phasing out of the Postbank as a service provider. Image: Supplied Cosatu
(The Post News) – The Congress of South African Trade Unions (COSATU) has slammed the South African Social Security Agency (SASSA)’s decision to terminate its contract with Postbank as a service provider for social grant payments.
The federation said it was extremely dismayed by Sassa’s announcement that they intend to end the Postbank’s participation in processing social grant payments to millions of recipients in favour of private banks.
The gold card system will gradually be phased out and it will be replaced by the new Postbank black card expected to take over all grant-related transactions. Officials have assured the public that the new card functions similarly, yet logistical challenges are already being anticipated.
“This bewildering move will see affected social grant recipients charged R10 per R1000 withdrawal whilst the Postbank is reported not to deduct such fees. When social grant recipients receive so little and the cost of living is continuously rising, they should be protected from fee deductions to fund the profit margins of private banks,” Cosatu said in a statement.
Sassa needs to negotiate with all bank providers to waive such fees for social grant recipients.
According to the trade union federation, Sassa’s move violates the government’s mandate to support the Postbank’s role as a state bank aimed at supporting the most poor and marginalised members of society.
“It is equally disappointing that SASSA’s decision undermines extensive interventions to stabilise, rebuild and grow the Postbank, including amending the Postbank Act to meet the requirements of banking legislation and overhauling its governance and IT systems,” Cosatu said.
Sassa, Postbank agreement termination will affect beneficiaries
Cosatu said if the Postbank is to be placed on a sustainable path and to fulfill its legislative mandate then the government, in particular SASSA, needs to provide it the space and support to do so. Similarly, when 27 million social grant recipients are struggling to make ends meet, then they should be protected from being fleeced of their little funds by banks and their overpaid CEOs.
It said it will be seeking urgent engagements with the Ministries for Social Development and Communications and Digital Technologies as well as SASSA on this deeply concerning development.
Meanwhile, Social Development Minister Nokuzola Tolashe also raised her concerns saying that the termination of the agreement between Sassa and the Postbank will negatively affect grant beneficiaries. Tolashe has appealed to the South African Reserve Bank to closely monitor the migration from the Sassa gold card to the new post office’s black card.
“We are really appealing to the Reserve Bank to put up their strategy so that we do not get involved in that. Because they have more than once indicated that it’s Sassa’s responsibility where there are financial implications. I accept that Chair … that it’s a lot of work.”
“However, I really want to emphasise that the Reserve Bank can play its game more sharply than it is. That’s my humble plea, Chair. So that in what they are saying it’s in the pipeline, it’s been tough … it’s being processed,” says Tolashe.
Sassa assured all the eligible beneficiaries that there will be no disruptions of social grants.
About the Author
